Green Mountain Falls as Sales Forecast Trails Estimates

Green Mountain Coffee Roasters Inc., maker of Keurig brewers and single-serve pods, fell the most in two months after forecasting fiscal second-quarter revenue that trailed analysts’ estimates.

The shares slid 5.4 percent to $46.32 at the close in New York, for the biggest drop since Dec. 6. Waterbury, Vermont- based Green Mountain declined 7.8 percent last year, compared with a 14 percent gain for the Russell 1000 Index.

Sales this quarter will rise 14 percent to 18 percent from a year earlier, the company said yesterday in a statement. That implies sales of $1.01 billion to $1.04 billion, trailing the $1.06 billion average of 13 estimates compiled by Bloomberg.

Green Mountain, which last year began selling the Keurig Vue and Rivo brewers, is seeing more competition from Starbucks Corp., which recently introduced its own single-serve machine, the Verismo. Green Mountain Chief Executive Officer Brian Kelley, who took the helm in December, is seeking to draw customers with different single-serve items including antioxidant coffee and tea cups.

Brewer shipments will decline “slightly” this quarter, compared with a year earlier, Chief Financial Officer Frances Rathke said on a conference call yesterday.

Green Mountain’s Keurig Vue V700 brewer costs $199.99 on the company’s website, while the Verismo 580 model is $199 on the Starbucks website. Vue machine sales for the quarter were about $19 million, Rathke said.

Marketing Plans

The company plans to increase its marketing spending this year and there will be more television ads than in 2012, Kelley said in an interview. A record 4.95 million Keurig brewers were sold during the quarter, and “a lot of it is driven by effective advertising,” he said.

Net income for the fiscal first quarter rose 3 percent to $107.6 million, or 70 cents a share, from $104.4 million, or 66 cents, a year earlier, the company said. Excluding certain items, profit was 76 cents a share. Analysts projected 65 cents, the average of 12 estimates compiled by Bloomberg.

The company raised its forecast for fiscal 2013 profit excluding some items to as much as $2.82 a share from a previous outlook of as much as $2.74. The average analyst estimate was $2.71.

Sales increased 16 percent to $1.34 billion in the three months ended Dec. 29. Analysts projected $1.33 billion. Revenue rose 21 percent to $863.7 million for single-serve cups and 14 percent to $377.3 million for brewers and accessories.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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